According to reports, Texas A&M agriculture economist Danny Klinefelter projects the demand for loans from USDA will surge. This comes as creditors seek to limit exposure, and farm prices continue a trend of instability.

Requests for emergency loans from USDA's Farm Service Agency have nearly doubled from last year. In fiscal 2008, loan obligations were at $629 million and have increased to $1.2 billion in fiscal 2009.

USDA forecasts farm incomes in 2009 at $54 billion, down $33.1 billion from 2008, and $9.6 billion below the 10-year average.

The Obama administration, earlier this year, provided more loans via the American Recovery Act funded at $173.4 million. In 2008, the farm bill raised the limit for direct operating loans by $100,000 to $300,000. The USDA Guaranteed Loan Program also raised limits to $1,112,000.

There is debate as to whether loan funds should be targeted to farmers who do not benefit from hog or poultry production contracts.

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